Why eBay Bought Skype

I for one didn’t get it. How does the IM/voice service fit the auction process? Then LightReading makes me see the light (sorta).

eBay Inc.’s most important use of Skype Technologies SA will be to improve communications between buyers and sellers, especially in the waning hours and moments of auctions at the site.

Rob Stavis of Bessemer Venture Partners, who has been involved with Skype since Bessemer led the startup’s A Round of funding back in 2003, tells Light Reading that this “friction” — which potentially slows a deal –is most apparent during the final two hours of eBay auctions, especially when high-value or complex merchandise (jewelry, autos) is involved.

As the auction clock ticks down, the pace of communications between buyers and sellers often picks up (just like at Sotheby’s), and the content of the communication becomes more detailed.

As it works now, eBay buyers use email as their primary means of communication with sellers during auctions. In fact, they generate about 5 million emails per day, according to the company.

“œMaybe that mode of communication doesn’t work with an hour to go,” Stavis says. “œIf the buyer is saying “˜gee I really like this car but I need to find out if it has a 6-disk changer,’ he might send an email and not get an answer back until it’s already too late to bid,” Stavis says.

That’s where Skype’s combo of IM,”presence,” and voice functionality would be especially effective, says Stavis. Through Skype, the seller can show himself “œpresent” to answer questions so that more bidders get the information they need and actually place bids.

OK, if that’s why you bought Skype, I’m still not convinced. Now, I not only have to worry about negative feedbacks on eBay, disgruntled buyers or sellers can say it straight to my face 🙂

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  • I don’t know why you say you don’t get it but it’s so obvious. This is just a perfect addition to the buying/selling medium. This will improve transactions as people gain more trust as they hear who’s selling or buying. Can you see what Ebay is soon to acquire? PALTALK! Or maybe not, but they will soon have video capability. Meg Whitman is just clever.

  • I found it fishy too to fit in Ebay’s current business, because acquiring Skype is like getting a hold of a sureball money making franchise that you know people won’t be able to live without (ex. Oil, Power, Telco, Water Distribution, TV)

    Some analysts find it hard to justify too

    http://news.com.com/Analysts+mixed+on+eBays+purchase+of+Skype/2100-1030_3-5861002.html?tag=nl

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